Silver as an investment

Letta’s Italy?

Be prepared for the next great transfer of wealth. Buy physical silver and storable food.

marctomarket.com / Marc Chandler / TUESDAY, APRIL 30, 2013

The first left-right coalition in Italy since 1946 has survived its first confidence motion in both chambers. As difficult as it may have been to break the political logjam, the hard work lies ahead for Prime Minister Letta.

A new government often has a honeymoon period. There are two tells that Letta’s honeymoon will be short-lived. First, initial polls show support for him is soft near 40%. In contrast, when Monti took office his public support rating was a lofty 70%–now that was a honeymoon. Second, Letta want a smaller cabinet, but was forced to accept 21 ministers rather than 12. Neither the center-left nor the center-right seemed willing to accept anything that would dilute its numbers.

This plays on concerns that although the cabinet lacks the heavy hitters and king makers in Italian politics, they still are pulling the strings from the sidelines. The relative youthfulness of the cabinet (average age 53 years, a decade younger on average than Monti’s cabinet) and the record representation by women, does not necessarily mean the old political elite have been pushed out as Renzi suggested.

Letta identified three issues that will be the initial priority of his government: halting the June payment of the unpopular IMU tax on primary residence, delay the implementation of the VAT hike planned for mid-year (22% from 21%) and end the government financing of political campaigns.

Getting rid of the IMU was one Berlusconi’s campaign promises, but Letta stopped short of fulfilling the promise. It appears that he has halted the June payment, but has not abolished the tax nor has he endorsed the refunding the sums previously paid. The tax may have greater symbolic value of the austerity than substance as according to a Wall Street Journal report, half of Italian households pay less than 150 euros in the IMU tax.

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Thanks to BrotherJohnF